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Technology Stocks : Loral Space & Communications -- Ignore unavailable to you. Want to Upgrade?

To: JMD who wrote (4625)	9/22/1998 2:17:00 PM
From: Bernard Levy	Read Replies (3) \| Respond to of 10852

Hi Mike: From my perspective, Mr. Schwartz's listing as number one contributor to the Democratic party during the 96 election is just as harmful to LOR as the failure of the Zenit rocket. By maintaining this high profile, he made himself a target, which is certainly his absolute right, but he also made LOR and his shareholders a target, including those such as myself who hold very different political views. LOR is in a line of business where it must be able to compete for government contracts. Since both Democrats and Republicans play a role in government, it is usually advisable to remain nonpartisan, and if political contributions must be made, to give small amounts to both sides (large amounts only encourage politicians to attempt to extort even larger amounts). As a consequence of Mr.Schwartz's actions, LOR is now heavily marked as being in the Democrats pocket. This image will be harmful when the next Republican administration will come to town (don't kid yourself, this day will happen some time). In the meantime, if legislation is needed to accomplish anything that LOR need (such as picking a portion of Comsat's assets), we might as well forget it. Note that this situation is completely independent of Bill Clinton's political fortune. Even if he was wildly popular, I would still view the size of Mr. Schwartz's contribution to his reelection campaign as extremely unwise (a smaller contribution falling below the radar screen would have been fine). Finally,as was pointed out before the aerospace/defense crowd tends to be on the conservative side of the political spectrum. In this context, Mr. Schwartz has always been an anomaly. His record as CEO of the old Loral was exemplary and certainly convinced everyone in the business that Bernard Schwartz was as patriotic as anybody. So, in spite of his unconventional political views, Mr. Schwartz was held in deep respect by all his peers (including DOD contract officers). I am afraid that this strong credibility has been eroded somewhat in recent months. For example, although I find all accusations of technology transfers to the Chinese offensive and ludicrous, I was troubled by the letter addressed by the head of LOR's review team to the Chinese indicating LOR would do (I am paraphrasing) its utmost to resolve the Long March launch problems. I apologize for one more negative post, but from my perspective the Zenit launch failure has been the catalyst which helped crystallize some latent concerns. I still think that LOR has a great business plan, and I am still holding all my LOR shares, but I am no longer an uncritical believer in the company. By the way, the Globalstar press release concerning the failed Zenit launch is not quite as candid as I would like (the claim that GSTRF/LOR informed shareholders of the launch failure as soon as it became aware of the failure is obviously incorrect). Best regards, Bernard Levy.